Yes, this is more or less your average touchpad that one can find from inside a laptop. This model, like majority of touchpads out there operates with PS/2 standard. This means that it can be directly plugged in to a PS/2 connector and with proper drivers, function as a mouse.

As it happens the PS/2 communication is not that difficult to achieve with an Arduino board. Kristopher has written an Arduino/Wiring library that offers all the functionality that we need at this point.